Take Action to Recover From Financial Fraud
Financial fraud is real and can be devastating. If you are a victim, you may be coping with the aftermath of a compromised identity, damaged credit and financial loss as well as a range of emotions, including anger, fear and frustration.
Full financial recovery
from investment fraud
may be difficult to achieve.
Full financial recovery may be difficult to achieve, but to improve your chances, it's critical that you report the crime as quickly as possible. Reporting any financial fraud, no matter how small, helps law enforcement, regulators and government agencies pursue the criminals committing the fraud.
Very often perpetrators will dispose of your money immediately after taking it. You may never get your money back. But recovery is about more than lost money. It's about protecting your future financial health and finding ways for you to recover emotionally from the crime. These steps can help you reclaim power from the fraudsters and move forward.
Step 1: Create an investment fraud file. Collect all documentation concerning the fraud in one file that's kept in a secure location. At a minimum, the file should include:
- the perpetrator's name, contact information and any of the fraudster's purported regulatory registration numbers;
- a timeline of events, which may span many years;
- the police report, if any;
- your most recent credit report from all three credit reporting companies; and
- any evidence of the fraud or deception.
Step 2: Know your rights. You have rights under federal and, in some cases, state law. For federal victim rights, check the U.S. Department of Justice's website. And for state victim rights, check with your state attorney general. You should also review the North American Securities Administrators Association's “Investor Bill of Rights.”
Step 3: Report to regulators. Reporting the fraud to national, federal and state regulatory organizations that oversee investment products and professionals may help you, and could help others avoid a similar fraud. Not sure which agency has jurisdiction? Don't worry, the organizations below regularly route tips and cases of suspected fraud to the most appropriate regulatory counterpart.
- Financial Industry Regulatory Authority (FINRA)
- U.S. Securities and Exchange Commission (SEC)
- North American Securities Administrators Association (NASAA)
- National Futures Association (NFA)
- U.S. Commodity Futures Trading Commission (CFTC)
Step 4: Report to law enforcement. Reporting the investment fraud to law enforcement is important to ensuring the responsible parties are investigated and preventing damage to other individuals. Contact any local law enforcement office to file a police report. You can also contact your local district attorney's office, and your state attorney general's consumer protection unit and the prosecution unit to report the fraud. You may also want to contact your local FBI field office or submit an online tip. You can also report the fraud to the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center.
Step 5: Report to the Federal Trade Commission. Use the FTC's Complaint Assistant. Lodging a complaint will also enter the fraud into the Consumer Sentinel Network so that law enforcement can stop ongoing fraud and track these crimes. This process will not initiate a criminal investigation of your case.
Step 6: Consider civil remedies. You may be able to recover some of your lost assets through arbitration, mediation or a civil lawsuit. If a securities broker is involved in the fraud, you may file an arbitration claim with or without an attorney. FINRA offers an overview of the dispute resolution process.
Step 7: Follow Up
Review the steps you've taken and follow up after 30 days with any law enforcement agencies or organizations that serve victims.
To learn more about these fraud recovery steps, and how to protect yourself from fraud, visit the FINRA Investor Education Foundation's website SaveAndInvest.org. Older investors with questions about their brokerage account statements or investments with a broker can also call the FINRA Securities Helpline for Seniors® toll-free at 844-57-HELPS (844-574-3577).